slides6 - Cost Shifting Excess Demand in Nursing Homes...

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Unformatted text preview: Cost Shifting Excess Demand in Nursing Homes Supply of health care Hospitals 2 Angela Fertig Spring 2010 Angela Fertig Supply of health care Hospitals 2 Cost Shifting Excess Demand in Nursing Homes I Last time, we discussed economies of scale and competition. I Today, we discuss 2 other topics relevant to hospitals. Angela Fertig Supply of health care Hospitals 2 Cost Shifting Excess Demand in Nursing Homes Monopoly Examples Cost Shifting Are the costs of uncompensated care passed on by hospitals to other patients? I Lets assume that hospitals are monopolies in their town meaning that they can choose their prices. I We need monopoly theory to understand. Angela Fertig Supply of health care Hospitals 2 Cost Shifting Excess Demand in Nursing Homes Monopoly Examples Monopolies Defn : Monopoly 1. one seller 2. no close substitutes 3. usually entry is difficult (barriers) Angela Fertig Supply of health care Hospitals 2 Cost Shifting Excess Demand in Nursing Homes Monopoly Examples Demand Curves I Demand tells you at each price, how much people are willing to buy. I Demand curve is downward sloping. I In competition (defined last time), demand curve is a horizontal line for any individual firm. They have to charge the price of the market....
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slides6 - Cost Shifting Excess Demand in Nursing Homes...

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